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Home / Company Law & Secretarial Services / Fundraising Compliance (Private Placement)
Last updated: 2 October 2026
Raising equity from investors means following the private placement and preferential allotment rules to the letter. Our team prepares the offer documents and resolutions, coordinates the valuation, and files the returns so the round closes cleanly.
Most private companies raise money from investors through a private placement under section 42, read with section 62(1)(c) for preferential allotment. The key rules are:
Where investors are foreign, FDI pricing and reporting (FC-GPR) apply as well.
Based on sections 42 and 62 of the Companies Act, 2013 and the Companies (Prospectus and Allotment of Securities) and Share Capital Rules. Last updated: 27 September 2026.
Maximum offerees per financial year, with exclusions
Private placement offer letter
To allot after receiving the money
To file PAS-3 after allotment
Interest on money not refunded in time
Needed for preferential allotment pricing
Errors here can make an allotment invalid or trigger heavy penalties.
Funds received before the special resolution and offer letter.
Investor money received in the regular operating account.
60 days pass without allotment or refund.
Services that usually go with a funding round.
Term sheets and SHAs.
Headroom for new shares.
Foreign investors.
Raising from existing members.
Instrument, price and investor list reviewed.
Board resolution and special resolution passed.
Registered valuer’s report obtained.
PAS-4 issued; separate bank account opened.
Shares allotted within 60 days of receipt.
PAS-3 within 15 days, certificates or demat credit, and FC-GPR where needed.
Close the round with complete records.
Return of allotment within 15 days.
Share certificates or demat credit to investors.
Register of members updated.
FC-GPR within 30 days of allotment.
Share your query and our team will reply during business hours.
Up to 200 persons in a financial year, excluding qualified institutional buyers and ESOP allotments.
60 days. If not allotted, the money must be refunded within the next 15 days, after which 12% interest applies.
For a preferential allotment by an unlisted company, yes — from a registered valuer.
Within 15 days of the allotment.
No. It must be kept in a separate bank account until allotment.
ACS – Director, Expertvuw Management Pvt Ltd
This work is handled by Expertvuw’s team, with filings made on the MCA portal. Certifications and audits required by law are issued by independent practising professionals engaged for your case.